Years ago, the word “churn” would conjure up wonderful visions of a motherly woman, working away over a clay pot, making butter for her family. Today, the mention of the word is quite different, especially for those in the communications industry. The word “churn” to a telecommunications service provider causes a cold, tingly feeling to run up and down their spine and causes the hairs on their neck to stand-up. In the telecommunications industry, churn refers a customer leaving one service provider and transitioning to another. The telecommunications industry is constantly looking for techniques to reduce their churn rate.
Some techniques that have been employed to reduce churn include providing financial incentives such as discounts and free services, the addition of new features, and upgrading equipment. Although these techniques, as well as other techniques have been instrumental in reducing churn, service provider companies are still in need of new and innovative techniques for reducing churn. Thus, there remains in the telecommunications industry a need for new and innovative techniques to decrease churn.
Churn is especially evident in the cellular telephone industry. Cellular service providers offer free minutes, roll-over minutes, free telephone upgrades and feature rich packages in an effort to attract and retain customers. Along with the churn issue, the cellular industry also faces another challenge—maximizing minute usage. Because cellular service providers generate revenue based on the number of minutes of talk time of their customers, the service providers are very motivated to increase the minute usage of their customer base. Increasing the minutes of usage of a cellular telephone service subscriber really includes two facets. One facet is focused on lengthening the duration of telephone calls and the other is focused on increasing the number of telephone calls. Thus, there is a need in the art for a technique to provide an incentive to cellular telephone customers that will discourage churn and encourage the users to place more calls and/or to extend the length of their calls.
Furthermore, when you look at a cellular telephone from a systems perspective, one realizes that a cellular telephone is actually a two-way radio and a computer. Because of this particular structure, cellular telephones have migrated into complex devices combining widely divergent technologies, such as MP3 players, cameras, personal assistants, Internet browsers, email applications, game platforms, and/or the like, with the cellular telephone technology. This has resulted in opening a wide array of techniques that can be employed to reduce churn and increase the number of usage minutes for cellular service subscribers.
The concept of churn can also be applied in many other settings other than telecommunications settings. For instance, online merchants greatly desire the attraction of customer traffic. For instance, online merchants such as EBAY, AMAZON.COM, OVERSTOCK.COM and many others could benefit from a technique that would encourage consumers to use their site and to return to their site next time a transaction is desired.